MTU Pushes For Participation In 777 Replacement

MTU Aero Engines already expects its revenues to effectively double by 2020, but it is counting on more programs to emerge that would ensure further growth.

CEO Egon Behle says the engine manufacturer is in talks to participate in several additional programs, including with General Electric (GE) and its possible new offering for the Boeing 777 and a re-engined Embraer 170/190 family.

“There is a strong likelihood that we will be together with GE (on the 777 replacement),” Behle said on the sidelines of the ILA Berlin Air Show. “There are intense discussions ongoing, but no papers have been signed yet.”

Boeing is currently considering its options for a replacement of the current generation 777 and has said it plans to make a decision on the basic direction by the end of this year. It is expected that whatever the new aircraft looks like, it will be equipped with new engines, too.

Behle also says that there are discussions ongoing with Embraer to re-engine the Embraer 170/190 and says that the geared turbo fan “would fit very well”.

GTF work is providing the bulk of the planned growth until 2020, but MTU also sees its existing business expanding. That will lead to the company opening more sites and expanding existing ones. MTU is in the process of buidling a blisk factory in Munich, where its headquarters are located. It is also considering expanding facilities at MTU Aero Engines Polska. Behle says that between now and 2020 there will be more bases opened in Latin America, the Middle East and Asia, particularly for its maintenance, repair and overhaul (MRO) activities.

Behle sees big potential for business jets in Asia, where that segment “is only just starting. The demand will be shifting to emerging regions.”

MTU is expecting €3.3 billion in revenues in 2012 and Behle can “already see the €4 billion.”

The company is also preparing technologies for any possible unmanned aerial vehicles (UAVs), a business that MTU is not currently involved. It has signed a joint venture agreement with Avio on possible UAV cooperation, “but at this time there is no program in sight,” Behle says. That being the case, MTU predicts that its commercial business will account for 92% of its revenues in 2020, up from 20% in 1985.